Wishful Thinking Revisited

Following the election of Scott Brown in Massachusetts, it looked for a time as is if the passage of the recent Health Care Reform legislation was unlikely. The most common arguments aimed at moderate Democrats in the House during this time period were as follows:

1) That the Health Care reform bill would become more popular after it had passed.

2) That given widespread voter ignorance, it was unlikely that this particular vote would have much effect on any individual House member’s re-election campaign.

Out of the original 50 districts, only 41 had members who cast a vote on health care reform and are running for reelection. If we just divide these members based on their health care votes, those who voted for health reform are running 2.7 percentage points behind those who voted against it. But, of course, we should control for other things, especially district conservatism, since those from the more conservative districts voted almost uniformly against reform. I also included the members’ DW-NOMINATE scores to distinguish the health care vote from the members’ overall voting records.

What I found was that Democratic supporters of health care reform are running 3.2 percentage points behind Democratic opponents. (This is statistically significant at the p?.05 level.) That’s a three percentage-point penalty resulting from a single roll call vote. I would describe that number as large. Most members of Congress win by much greater margins than that, of course, but for Democratic incumbents from conservative districts in a distinctly anti-Democratic year, three points is serious business. Indeed, of the 41 Democrats I examined, only six are currently forecast to win by more than three points (and none of those voted for health care reform).

For those who supported the (ironically titled) “Affordable Health Care for America Act,” I suppose this will simply confirm that, in politics at least, no good deed goes unpunished. However, for those, like myself, who are very skeptical of the financial feasibility of the bill (or, more accurately, convinced the bill was financially irresponsible), this is a somewhat encouraging example of democratic accountability. In either case, however, it illustrates the dangers inherent in trusting the self-serving narratives of the technocratic class.

John Henry

Post navigation

14 Comments

By financially irresponsible, I assume you think that it will not pay for itself and actually reduce public deficits. I assume you think that the CBO is simply wrong.

Even so, I assume you will admit that the Act at least attempts to pay for the subsidizes involved, which was not true of any of the three big Bush episodes in fiscal irresponsibility – tax cuts tilted toward the rich, war, and Medicare Part D – each of which cost more than the price tag for healthcare, and none of which was paid for.

I assume you also think that extending insurance to 32 million people is not worth the risk that the CBO might know something more than you.

What is truly telling about Obamacare is that this is the signal accomplishment of this administration, and that not one Democrat running for Congress is touting this “achievement” in campaign ads, while several Democrats are touting their opposition to Obamacare. Bloggers can say what they will, but the proof that something is truly unpopular is the total silence of the candidates of the party which passed the legislation.

By financially irresponsible, I assume you think that it will not pay for itself and actually reduce public deficits. I assume you think that the CBO is simply wrong.

No, I think the CBO was correct. They followed their stated methodology, and acknowledged that their methodology was very unlikely to accurately reflect reality. The difficulty is that we were already on the path to financial insolvency from Medicare and Social Security; by using up all of the easiest cuts to those programs on this go-round to “pay for” an expansion of entitlements (and notice the payments don’t start until 2014, while revenues are collected much earlier), we made our long-term debt load significantly more difficult to service. Additionally, the Act did not do much at all to increase the supply of health care services; it’s primary effect is to increase demand. This will dramatically increase costs and/or rationing in the long-term.

Even so, I assume you will admit that the Act at least attempts to pay for the subsidizes involved, which was not true of any of the three big Bush episodes in fiscal irresponsibility – tax cuts tilted toward the rich, war, and Medicare Part D – each of which cost more than the price tag for healthcare, and none of which was paid for.

I know the tu quoque is invaluable for partisan hacks and polemicists the world over, but I find it tiresome. The Bush tax cuts were fiscally irresponsible. The Iraq invasion did not meet just war criteria, and additional taxes were not raised to finance it. Medicare Part D was somewhat fiscally irresponsible (although I can’t imagine why you, of all people, would object to it). So what? The Bush era deficits were a drop in the bucket compared to the current projected Obama deficits, and Bush had more reason to suspect they could be paid off than Obama. If you actually object Bush’s record on the grounds of fiscal irresponsibility (as opposed to reflexive partisanship), I imagine that you are horrified by the Obama-era deficits. Certainly, the polls suggest that many voters are.

I assume you also think that extending insurance to 32 million people is not worth the risk that the CBO might know something more than you.

As I said, I think the CBO did a perfectly fine job; I simply accept their statements that their projections are unlikely to match reality. Keep in mind that insurance is not health care; a promise to provide health care is not health care. The AHCAA is a leap into the dark. We are certain it will be expensive. We are certain it will lead to more rationing. We aren’t certain of much else, and if the wishful projections of the health care reform proponents on the finances are anything like their political prognostications, we will have simply added another unaffordable entitlement program on top of social security and medicare. The goal of expanding access to health care is admirable; the moment was not right and the means were ill-chosen.

Heck, even the Dems aren’t arguing anymore that it will save money and reduce the deficit:

I suppose it’s just a concession to voter ignorance: any educated voter knows that financing health care for 32 million more people (10% of the population) will reduce the deficit. I chalk it up to Republican lies and fear-mongering. 😉

Polling is typically +/- 3.5% error. Add to that a likely voters model which introduces its own error, and you end up with crap like this that treats an issue as determinate that may or may not be determinate. There are so many problems with this analysis I don’t hardly know where to begin. Probably a good start would be requiring him to retake his stats course. If he would have ran the model with several other votes, we might approach having some data on what is costing people voters in certain districts. This again assumes congressional votes are determinant in elections which is hardly settled. Of course the easy way to ascertain this is to ask the poll question, “Does Congresscritter’s vote for/against health care reform make you more likely or less likely to vote for said critter?” While it wouldn’t be perfect, it would be better than trying to infer by a several weeks of polls occuring months before likely voters starting really caring about candidates.

Polling may typically have +/- 3.5% error, but the numbers above aren’t based on one poll, but rather an aggregate of a number of polls across many races based on 538.com predictions, which is pretty much the best available data (and hardly likely to be skewed toward GOP favorable narratives). It’s not perfect as professor Masket acknowledges, but if you want to debunk the poll, I think you’ll have to do better than the observations above. I doubt political science professor Seth Masket needs to retake (presumably one of his own) stats classes, and I certainly took it as an argument against interest given the respective political affiliations of Matt Yglesias, Masket, and 538.com.

John Henry writes: “you actually object Bush’s record on the grounds of fiscal irresponsibility (as opposed to reflexive partisanship), I imagine that you are horrified by the Obama-era deficits.”

I am horrified by this statement. Are you at all aware why the deficits are so high? The vast majority can be explained by the Bush-era policies and the automatic stabilizers from the deepest recession since the Great Depression. I assume that not even you would propose a procyclical fiscal tighening in the midst of deep recession.

As for the old cannard on social security and medicare – yes, medicare is becoming unsustainable (social security is totally different, something the punditocracy simply don’t get). The healthcare bill takes the first step toward curbing the growth of costs, including with the Medicare commission that Republicans are demonizing (funny how they can rail against “government” healthcare and defend a single payers system tooth-and-nail at the same time, isn’t it?). In fact, most experts praise the delivery system reforms as the first ever real attempt to bend the curve here. I advise you to actually look at what is in the bill (start with the Kaiser video if that is simpler).

On costs, another points is that private insurance costs are rising dramatically more than public costs. Of course, this cost is really borne by lower wages, and so is not transparent, but it is real.

Finally,I find it dismaying that you paint pictures of phantom “rationing” while saying nothing about the scourge of rationing by cost today in uninsurance and underinsurance. Brining 32 million more people into the net is a great achievement. And yet you remain cavalier. You claim to support the goal, but you claim the means were ill-chosen. Please tell me what means you would choose. I can tell you that universal coverage pretty much always requires some form of community rating alongside an individual mandate. This is why none of the Republican proposals would not even make a dent in the number of uninsured. The laughable part is that this reform was considered pretty conservative only a decade ago – it was basically the Republican alternative to Clinton healthcare reforms, and formed the basis of Romney’s reform. But now, with the inmates running the asylum, it has been transformed from a prudential private-sector approach to a socialist conspiracy. And you call me a partisan hack.

I am horrified by this statement….I assume that not even you would propose a procyclical fiscal tighening in the midst of deep recession.

This is either ignorant or deliberately obtuse MM. The major expenditures for the health care bill don’t even start until 2014. The point above was obviously not that right now, in the midst of a terrible recession, we’re running deficits. Of course we are; tax revenues fell of a cliff. The point was that adding a new entitlement program to our long term commitments was unwise; it makes the structural problems with our existing entitlement obligations worse.

The healthcare bill takes the first step toward curbing the growth of costs, including with the Medicare commission that Republicans are demonizing (funny how they can rail against “government” healthcare and defend a single payers system tooth-and-nail at the same time, isn’t it?). In fact, most experts praise the delivery system reforms as the first ever real attempt to bend the curve here

Yes, as I mentioned above, the health care reform bill makes some reforms to medicare (I have a friend in charge of implementing some of them – and he’s skeptical they really will reduce costs). But all of these ‘cost-savings’ were used to finance an expanded entitlement. Even if the reforms to Medicare are as effective as advocates hope (about which many experts, including my friend, are skeptical), that money is simply being used to finance another entitlement that we also have to hope won’t be more expensive than forecasted. The Administration has dishonestly tried to double count the Medicare savings on a number of occasions – despite the CBO’s explicit statements to the contrary. Calling this activity ‘curbing costs’ requires some real creativity.

On costs, another points is that private insurance costs are rising dramatically more than public costs. Of course, this cost is really borne by lower wages, and so is not transparent, but it is real.

Finally,I find it dismaying that you paint pictures of phantom “rationing” while saying nothing about the scourge of rationing by cost today in uninsurance and underinsurance. Brining 32 million more people into the net is a great achievement

Right. Or rather, it would be a great achievement if it doesn’t cause problems worse than it sought to resolve. In Massachusetts, costs have skyrocketed, and it’s not clear that health outcomes have improved. I believe that a similar thing will happen in the U.S. as a whole, and I see little reason for optimism on that account. A promise of health care that can’t be delivered on because of much higher costs and lower supply of medical professionals is not a better outcome than the status quo.

You are making a number of factual errors that have been debunked many times.

First, the huge long-term funding gap in entitlement program is almost exclusively medicare; social security makes up only between 15-20 percent of it, if I am remembering correctly. Social security can be fixed very easily, while bending the long-term healthcare cost curve (both public and private) is a lot harder. And you are not giving the PPACA any credit for at least taking a tentative step in the right direction.

Second, PPACA is not an entitlement. It is an mandated expansion of insurance through the private sector. You might call the subsidies an entitlement, but that twists the definition somewhat. (And anyway, if you are so worried about long-term trends, how about we agree to raise taxes on the rich and cut military spending – the two discretionary items that would have the largest budgetary impact?).

Third, you misinterpret, or misunderstand, what the CBO found on premiums. See here: http://vox-nova.com/2009/12/03/health-reform-bill-lowers-premiums/#more-11179. The bottom line is this: premiums in the small- and large-group markets (159 million people, the vast majority) will see little change (a minor reduction, in fact). In the individual market, you do see premiums rise by 10-12 percent, but the CBO goes to great pains to explain that this is all from better packages. With access to real affordable options, people are choosing higher quuality packages – this accounts for a 30 percent price increase, suggesting countervailing savings from the individual mandate and elsewhere. Oh, and if you get a subsidy, your premiums fall by 60 percent. Not a bad deal.

Fourth, you claim the Romney experiment has failed. Not so. Coverage is now close to universal, and both the individual and employer mandate are working. This reform mirrored the federal reform on access to healthcare, but not on cost control, so we won’t expect to see big savings, especially in the group markets. But there is one area where we do – the same old previously-dysfunctional individual market. Jonathan Gruber wrote a paper on this, and his conclusion is that the average individual premium fell by 40 percent, while the rest of the nation was seeing a 14 percent increase. Again, this is not bad.

First, the huge long-term funding gap in entitlement program is almost exclusively medicare; social security makes up only between 15-20 percent of it, if I am remembering correctly. Social security can be fixed very easily…

First of all, 15-20 percent is a significant component of a problem; it’s not a ‘canard’ to note that. And while the fixes for social security are easy conceptually, that does not mean they are easy politically. If they were, they would already have been made (and many of them, like means testing, will be fought tooth and nail by the Obama Administration).

Second, PPACA is not an entitlement. It is an mandated expansion of insurance through the private sector. You might call the subsidies an entitlement, but that twists the definition somewhat.

It’s not “twisting” the definition at all in this context; health care subsidies are simply slightly differently structured entitlement programs. Certainly it makes no difference from a fiscal perspective, which is what we were discussing.

Third, you misinterpret, or misunderstand, what the CBO found on premiums. See here: http://vox-nova.com/2009/12/03/health-reform-bill-lowers-premiums/#more-11179. The bottom line is this: premiums in the small- and large-group markets (159 million people, the vast majority) will see little change (a minor reduction, in fact). In the individual market, you do see premiums rise by 10-12 percent, but the CBO goes to great pains to explain that this is all from better packages.

Well, it depends on what ‘a better package’ is. If the new package is expensive as projected, less and less people will be able to afford it, which in turn places more pressure on private market premiums. A 7 series BMW is better than a Civic. But a Civic is fine for most people; what the new health care reform bill did was ban the sale of Civics, and mandate everyone purchase a somewhat cheaper 7 Series. For some people that’s great – they get a cheaper 7 series; for a lot of other people (who will likely then require more government subsidies) it means they can’t afford a car at all.

Fourth, you claim the Romney experiment has failed. Not so. Coverage is now close to universal, and both the individual and employer mandate are working. This reform mirrored the federal reform on access to healthcare, but not on cost control, so we won’t expect to see big savings. Jonathan Gruber wrote a paper on this, and his conclusion is that the average individual premium fell by 40 percent, while the rest of the nation was seeing a 14 percent increase. Again, this is not bad.